This week we enter the back end of the month which always carries less important data in Australia, and around the world, than the early part of the month.
That is not to say there is isn’t anything important out. Because the Fed has a meeting this week and we’ll get the infamous “dots” scatter point chart of interest rate expectations. But generally with the second half of the month, the trends established early in the month tend often to recur in the second.
That’s important given the Aussie dollar is under pressure, interest rates around the world are selling off and stocks, although doing better then the aforementioned assets, are stalling. The dollar is trading at 0.9038 ahead of the Monday open – if the fall continues we could see a break below the landmark US90c point.
The RBA minutes are out on Tuesday. Any language around the Aussie dollar will be forensically examined. The other Australian data this week is second-tier stuff.
Parliament is still out for another week but with the terror alert raised to high and the Prime Minister announcing Australia will now commit 600 military personnel to support the fight against ISIS, expect more discussion about the impact of this on people’s day-to-day lives. In this initial phase as the population adjusts to the new official threat level it could subdue economic activity. That will show up in data released in about 6-8 weeks.
Looking overseas and the FOMC meeting is the highlight with the release at 4am Friday morning AEST of the decision most likely for a further taper.
The whole world will be watching Scotland’s independence vote on Thursday, and we’ll be seeing the results on Friday here in the Asian time zone. Credit Suisse believes Scotland will fall into a deep recession if it decides to split from the UK. There are vast unknowns, from whether Scotland can keep the pound to what businesses or banks might leave the country, making this a potentially significant risk event in the week ahead.
Also important around the globe is UK CPI Tuesday, the ZEW survey in Germany, BoE Minutes, EU and US CPI, and NZ GDP.
So while the data might be light, it’s shaping up as a huge week for markets and the week when the Aussie dollar is going to head into below 90 cents.
Here is Westpac’s excellent calendar of all the main data for the week.